Credit Suisse pledges to return 50% of net income to shareholders by 2019
Credit Suisse (CS), in its Investor Day presentation, said that “As we approach 2018 – the final year of our three-year restructuring plan – we remain committed to achieving the 2018 targets announced last year for the Swiss Universal Bank, International Wealth Management, Investment Banking & Capital Markets and Global Markets.
For our Wealth Management & Connected business in Asia Pacific, we are confident that we can achieve our 2018 target of CHF 700M of adjusted pre-tax income for the full year 2017 ahead of schedule and we are therefore setting a new target for 2018 of CHF 850M.
Reflecting our strong progress on cost, we are confident of beating our target cost base of less than CHF 18.5B for 2017 and we estimate that our total cost base for the year will be approximately CHF 18B .
We are confirming our 2018 cost base target of less than CHF 17B.
Looking ahead, the Group aims to operate with a total cost base of between CHF 16.5B and CHF 17B in 2019 and 2020, subject to market conditions and investment opportunities within this range.
We are confident that we can complete the wind-down of our non-core unit, the Strategic Resolution Unit, and reach our targeted adjusted pre-tax loss of approximately CHF 1.4B in 2018.
We have lowered our 2019 adjusted pre-tax loss target for the Strategic Resolution Unit from approximately $800M to approximately $500M, which represents a significant improvement… Our objective is to achieve a Group reported return on tangible equity of 10% to 11% for 2019 and 11% to 12% for 2020.
We aim to operate with a look-through CET1 ratio of above 12.5% from 2018 to 2020, before the implementation of the Basel III reforms beginning in 2020.
Cumulatively in 2019 and 2020, as we continue to strengthen our capital generation, we expect to allocate approximately 20% for investment in wealth management and connected businesses .
We also expect that approximately 30% of the cumulative capital generated will be used for the RWA uplift resulting from Basel III reforms and other contingencies. We also aim to increase returns to shareholders and plan to distribute 50% of net income earned to them primarily through share buybacks or special dividends.”
CS closed at $16.65.
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